Hire purchase calculator

A hire purchase calculator works out the monthly payment, total interest and total amount payable when you repay a car’s whole price, plus interest, over a set term. The car is yours once the final payment and any option-to-purchase fee are paid. Enter the figures from a quote to see the sums.

An example, not a quote — Autoza is not a lender or broker.

Your agreement

Cash price of the car

Deposit or part-exchange

MoneyHelper says a hire purchase deposit is usually around 10% of the car’s value.

Number of monthly payments

In months, for example 48. A desktop keyboard also takes “4 years”.

APR (%)

Pre-filled with 12%, the average APR on hire purchase for used vehicles in the FCA’s survey of lenders’ 2023 agreements (CP25/27 Technical Annex 2, 7 October 2025). That is published market data, not a rate on offer — replace it with the APR on your own quote.

Option-to-purchase fee

MoneyHelper says this fee is usually about £100; yours is on your agreement. Left blank it counts as nil.

Optional: PCP final payment, to compare

Enter the optional final payment (balloon, or guaranteed minimum future value) from a PCP quote on the same car and the comparison appears below.

Enter a cash price and a term to see the figures.

Worked example: what hire purchase costs

£14,000 cash price, £2,000 deposit, 48 months, 12% APR. An illustration, not a typical deal. An example, not a quote — Autoza is not a lender or broker.

A hire purchase agreement worked through, every figure produced by the calculator’s own maths
Figure	Hire purchase
Amount of credit	£12,000.00
Monthly payment (× 48)	£312.40
Total of the monthly payments	£14,995.20
Final payment at the end	None (plus any option-to-purchase fee)
Total interest	£2,995.20
Total amount payable	£16,995.20
When the car is yours	After payment 48

Total interest is what the agreement costs over the cash price, and it is the figure to compare between quotes alongside the total amount payable. A longer term lowers the monthly payment and raises the total interest. For a personal loan rather than hire purchase, use the car finance calculator.

Ending a hire purchase agreement early

There are two routes. You can pay the agreement off: section 94 of the Consumer Credit Act 1974 lets you discharge a regulated agreement at any time by notifying the lender and paying what you owe, less a rebate of the interest no longer due. On a fixed-rate agreement the lender may also claim compensation under section 95A when more than £8,000 is repaid in a 12-month period: up to 1% of the amount repaid early (0.5% if a year or less was left), and never more than the interest it would have earned to the original end date. Or you can end it and return the car: section 99 gives that right at any time before the final payment falls due, by giving the lender notice in writing, and section 100 caps what it can cost at the amount by which half the total price exceeds what you have paid. An example, not a quote — Autoza is not a lender or broker.

On this page’s example (£14,000 car, £2,000 deposit, 48 months at 12% APR) half the total price is £8,497.60. After 12 payments you would have paid £5,748.80, so the most you could be asked to pay to end it then is £2,748.80. The half-rule point is reached at month 21 of 48 (44% of the way through): on hire purchase it falls near the middle of the term because there is no final payment inflating the total price, and a deposit counts as paid from day one. That figure is a ceiling, not a fixed charge, and you must still return the car, so check the termination clause in your own agreement.

To work out the point for an agreement with a final payment, use the PCP calculator, or read voluntary termination of car finance.

Sources, read 5 October 2026: Consumer Credit Act 1974, section 94 (right to complete payments ahead of time); Consumer Credit Act 1974, section 95A (compensation for early settlement); Consumer Credit Act 1974, section 99 (right to terminate hire-purchase agreements); Consumer Credit Act 1974, section 100 (liability on termination); Consumer Credit Act 1974, section 189(1) (definition of total price).

How these figures are worked out

The APR is converted to a true monthly rate, not divided by 12.

monthly rate = (1 + APR)^(1/12) − 1

An APR is an effective annual rate, so the monthly rate it implies is the twelfth root of (1 + APR) minus one. Dividing the APR by 12 instead gives a nominal rate that overstates the monthly charge: on £18,000 over 48 months at 12% APR the two methods differ by about £5 a month. This calculator uses the effective rate, which is how the FCA’s APR rules define an APR.

Payments are rounded to the penny. A lender’s own schedule can differ from these figures by a few pence a month from rounding, and by more where its agreement sets fees, payment dates or a final payment due a month after the last instalment, so these figures do not reproduce a lender’s quote. FCA Handbook, CONC App 1.2.6R (read 5 October 2026).

Hire purchase or PCP?

The difference is the final payment. Hire purchase repays the whole price, so the car is yours after the last payment; a PCP leaves a slice of the price as an optional final payment, which lowers the monthly payment, and adds a mileage limit. The PCP calculator works through the final payment, the mileage limit and what handing the car back costs.

Who you are dealing with

The agreement is with the finance company rather than the dealership, and the dealer is normally acting as a credit broker — who sets the APR on car finance covers what that means for the rate you are offered. If you are buying privately rather than from a dealer, check whether the car you are looking at still has finance on it, because outstanding hire purchase means the seller does not yet own it.

Sources

Each was fetched and read on 5 October 2026. Autoza is not authorised by the Financial Conduct Authority and does not give financial advice; An example, not a quote — Autoza is not a lender or broker.

FCA, Updated diagnostic report on motor finance commission arrangements (March 2026), paras 4.13 to 4.16 — what the forms of hire purchase are, who owns the car, and the choices at the end of the agreement.
Consumer Credit Act 1974, section 94 (right to complete payments ahead of time) — paying off a regulated agreement early.
Consumer Credit Act 1974, section 95A (compensation for early settlement) — the up-to-1% charge a lender can claim when more than £8,000 is repaid early on a fixed-rate agreement.
Consumer Credit Act 1974, section 99 (right to terminate hire-purchase agreements) — the right to end an HP or PCP agreement before the final payment falls due.
Consumer Credit Act 1974, section 100 (liability on termination) — the half-of-total-price ceiling on what ending early can cost.
Consumer Credit Act 1974, section 189(1) (definition of total price) — the total price including any sum payable on the option to purchase.
FCA Handbook, CONC App 1.2.6R — how an APR is defined, and so how it converts to a monthly rate.
Financial Ombudsman Service decision DRN-3597504 (12 January 2023) — an example of mileage terms in a real agreement (5,000 miles a year, 8p a mile including VAT), and excess mileage allowed on voluntary termination.

An example, not a quote — Autoza is not a lender or broker.

Autoza is not authorised by the Financial Conduct Authority and does not give financial advice. This is an illustration produced from figures you entered, and it will differ by a few pence a month from a lender’s paperwork, more where fees or payment dates differ. The APR pre-filled above is published FCA market data, not a rate available from us or from anyone else.

Frequently Asked Questions

What does a hire purchase calculator work out?

What is the difference between hire purchase and PCP?

On hire purchase you repay the whole cash price across the term, so when the last payment and any option-to-purchase fee are made the car is yours. A PCP defers a large slice of the price into an optional final payment, which lowers the monthly payment. The PCP calculator covers it.

How much interest will I pay on a hire purchase agreement?

Interest is charged each month on the balance still owed, so it falls as you repay. In this page’s example, a £14,000 car with a £2,000 deposit over 48 months at 12% APR costs £312.40 a month and £2,995.20 in total interest, for a total amount payable of £16,995.20 including the deposit. Change the term or the APR and the figure changes: a longer term lowers the monthly payment but raises the total interest.

Do I own the car during a hire purchase agreement?

No. You are hiring it with an option to purchase, and title stays with the finance company until the final payment and the option-to-purchase fee are made. That has two practical consequences: you cannot sell the car while money is outstanding without settling the agreement first, and because the lender still owns it the protections around repossession under the Consumer Credit Act apply to you. It is also why a used car can turn out to have outstanding finance on it — the seller never owned it to sell.

Is there a mileage limit on hire purchase?

Not as part of the structure. A plain hire purchase agreement with no final payment has no future value to protect, so it needs no mileage allowance. But read the agreement itself: some agreements described as hire purchase do carry one, as the one in Financial Ombudsman Service decision DRN-3597504 did, because a PCP is a form of hire purchase in law.

Does a longer hire purchase term cost more?

Each monthly payment is smaller and the agreement costs more overall, because interest accrues on the balance outstanding and a longer term leaves a larger balance outstanding for longer. Put the same cash price, deposit and APR into the calculator above at two different terms and compare the total amount payable rather than the monthly payment — the monthly figure falls and the total rises. A longer term also means longer before you own the car, since title does not pass until the final payment and the option-to-purchase fee are made.

Can I hand a hire purchase car back early?

Yes — section 99 of the Consumer Credit Act 1974 gives a statutory right to terminate at any time before the final payment falls due, and it applies to HP exactly as it does to PCP. What you owe on doing it is capped by section 100 at the amount by which half the total price exceeds what you have paid. On HP that half-way point lands close to the middle of the term, because there is no balloon inflating the total price. The PCP calculator covers an agreement with a final payment.